a) Note that the CPI-based rate of inflation between 2022 and 2023 in the baseline scenario provided is 9.6%. Suppose, instead of rising from $2 to $2.50 between 2022 and 2023, the price of hamburgers rose to $3.50. What would be the rate of inflation? Instructions: Round your answer to one decimal place. %. b) Reset the table. Now, suppose instead of rising to $8 in 2023, the price of movie tickets rose to $9. What would be the rate of inflation? Instructions: Round your answer to one decimal place. % c) The impact of the additional $1 increase in the price of hamburgers versus the baseline has a (Click to select) impact on the CPI- based rate of inflation than an additional $1 increase in the price of movie tickets. This is because of the greater weight attributed to (Click to select) in the fixed basket of goods on which the CPI calculation is based.
a) Note that the CPI-based rate of inflation between 2022 and 2023 in the baseline scenario provided is 9.6%. Suppose, instead of rising from $2 to $2.50 between 2022 and 2023, the price of hamburgers rose to $3.50. What would be the rate of inflation? Instructions: Round your answer to one decimal place. %. b) Reset the table. Now, suppose instead of rising to $8 in 2023, the price of movie tickets rose to $9. What would be the rate of inflation? Instructions: Round your answer to one decimal place. % c) The impact of the additional $1 increase in the price of hamburgers versus the baseline has a (Click to select) impact on the CPI- based rate of inflation than an additional $1 increase in the price of movie tickets. This is because of the greater weight attributed to (Click to select) in the fixed basket of goods on which the CPI calculation is based.
Chapter17: Inflation
Section: Chapter Questions
Problem 5SQ
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Transcribed Image Text:a) Note that the CPI-based rate of inflation between 2022 and 2023 in the baseline scenario provided is 9.6%. Suppose, instead of
rising from $2 to $2.50 between 2022 and 2023, the price of hamburgers rose to $3.50. What would be the rate of inflation?
Instructions: Round your answer to one decimal place.
%.
b) Reset the table. Now, suppose instead of rising to $8 in 2023, the price of movie tickets rose to $9. What would be the rate of
inflation? Instructions: Round your answer to one decimal place.
%
c) The impact of the additional $1 increase in the price of hamburgers versus the baseline has a (Click to select) impact on the CPI-
based rate of inflation than an additional $1 increase in the price of movie tickets. This is because of the greater weight attributed to
(Click to select) in the fixed basket of goods on which the CPI calculation is based.
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